Paris Office Vacancy Rate Lowest in Almost 20 Years

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New reports indicate the Paris office vacancy rate is the lowest in almost 20 years.

We explain why this is positive news for everyone interested in our capital’s real estate markets.

Available rentals now just 2.2%

The number of vacant offices in the French capital has fallen to their lowest level since 2001. Now, with just 2.2% of business properties available and on the market, it’s an almost two-decade low.

But how does this compare to rentals in recent years?

Back in 2010, the vacancy rental rate sat around the 6% mark. In more recent years, there has been a noted decline in office availability, especially since 2016.

Supply decreased further last year, dropping by 8%. Estimates now suggest there are just 370,000 square meters of real estate available in the capital.

These rates mean Paris is one of the most popular business capitals anywhere in the world.

Office rates on the rise

As you would expect, when supply cannot meet demand, rental prices rise. This is evident in the current rates for office space in Paris, which are seeing soaring prices.

However, despite these low levels of office availability and higher rental prices, business properties are continuing to succeed across the board.

In fact, they are breaking records, reaching the highest office rental prices ever seen in Paris.

The most popular central areas for office space in Paris generate 45% of these transactions. That is, the 1st, 2nd, 8th, 9th, 16th, and 17th arrondissements (districts).

Here in these ‘prime rent’ locations, prices now reach a ceiling of 860€/m². This is a return to prices not seen since the financial crisis of 2007/8.

All in all, this is fantastic news for business landlords with office space to rent.

The Paris office vacancy rate compared to Europe

When comparing the Paris office vacancy rate to the rest of Europe, substantial differences are evident.

With an average rate of 5.2% in the 15 principal markets of Europe, demand is high. But it does not match the limited availability seen in the French capital. Transaction volume is also up across Europe, a trend noticed for several years now.

Building restrictions sets Paris apart

The restriction on new construction in Paris also sets it apart from other European capitals.

In Paris, the building of new skyscrapers to meet business demand is not possible. Instead, the refurbishment and remodeling of existing buildings is the norm.

Last year, a number of these office restructuring projects began. When complete, they’re set to increase the number of square meters available in the medium term.

This will go some way to satisfy the ongoing demand.

One of the most anticipated projects is the restructuring of the former headquarters of Peugeot in the 16th. The revamped building is set to include 33,500 square meters of office space, opening in 2022.

Another is the building previously occupied by the SMA Insurance Group in the 15th. Known as ‘biome,’ this refurbishment project will house 24,500 m2 of brand-new offices.

Positive news for all Paris real estate

Even if your interest lies in residential real estate rather than business properties, this is still positive news.

A healthy commercial market is strongly tied to the private real estate market. And in Paris, demand remains high for both.

56Paris are here to assist and offer advice. Why not get in touch with the friendly team today, and see how we can help you?

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